Bill Text: WV HB5582 | 2024 | Regular Session | Enrolled
Bill Title: Modifying exceptions for real estate appraisal licensure.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Passed) 2024-04-22 - Chapter 204, Acts, Regular Session, 2024 [HB5582 Detail]
Download: West_Virginia-2024-HB5582-Enrolled.html
WEST VIRGINIA LEGISLATURE
2024 REGULAR SESSION
ENROLLED
House Bill 5582
By Delegate Phillips
[Passed March 7, 2024; in effect ninety days from passage.]
AN ACT to amend and reenact §30-38-1, §30-38-3, §30-38-6, §30-38-7, and §30-38-11 of the Code of West Virginia, 1931, as amended, relating to updating the requirements regarding real estate appraisal licenses.
Be it enacted by the Legislature of West Virginia:
ARTICLE 38. THE REAL ESTATE APPRAISER LICENSING AND CERTIFICATION ACT.
§30-38-1. Real estate appraiser license required; exceptions.
(a) It is unlawful for any person, for compensation or valuable consideration, to prepare a valuation appraisal or a valuation appraisal report relating to real estate or real property in this state without first being licensed or certified as provided in this article. This section shall not be construed to apply to persons who do not render significant professional assistance in arriving at a real estate appraisal analysis, opinion or conclusion. Nothing in this article may be construed to prohibit any person who is licensed to practice in this state under any other law from engaging in the practice for which he or she is licensed.
(b) No person other than a person licensed or certified under this article may use the title of licensed appraiser or certified appraiser or any title, designation or abbreviation likely to create the impression that the person is licensed or certified by the state.
(c) This article does not apply to:
(1) A real estate broker or salesperson licensed by this state who, in the ordinary course of his or her business, gives an opinion to a potential seller or third party as to the recommended listing price of real estate or an opinion to a potential purchaser or third party as to the recommended purchase price of real estate, when this opinion as to the listing price or the purchase price is not to be referred to as an appraisal, no opinion is rendered as to the value of the real estate and no fee is charged;
(2) A casual or drive-by inspection of real estate in connection with a consumer loan secured by the real estate, when the inspection is not referred to as an appraisal, no opinion is rendered as to the value of the real estate and no fee is charged for the inspection;
(3) An employee who renders an opinion as to the value of real estate for his or her full-time employer, for the employer's internal use only and performed in the regular course of the employee's position, when the opinion is not referred to as an appraisal and no fee is charged;
(4) Appraisals of personal property, including, but not limited to, jewelry, household furnishings, vehicles and manufactured homes not attached to real estate;
(5) Any officer or employee of the United States, or of the State of West Virginia or a political subdivision thereof, when the employee or officer is performing his or her official duties: Provided, That such individual does not furnish advisory service for compensation to the public or act as an independent contracting party in West Virginia or any subdivision thereof in connection with the appraisal of real estate or real property: Provided, however, That this exception shall not apply with respect to federally related transactions as defined in Title XI of the United States Code, entitled "Financial Institutions Reform, Recovery, and Enforcement Act of 1989"; or
(6) An individual not licensed in accordance with §30-38-1, et seq. of this code who completes an evaluation of the value of real estate serving as collateral for a loan made by a financial institution insured by the federal deposit insurance corporation: Provided, That the evaluation is in a format that includes the following statements in a conspicuous location and in bold print: "This evaluation has been prepared in compliance with §30-38-1(c)(6) and the following conditions are satisfied, (A) The amount of the loan is equal to or less than the federal de minimus threshold; (B) the evaluation is used solely by the lender in its records to document the collateral value; (C) the evaluation clearly indicates on its face that it is for the lender's internal use only; (D) the evaluation is not labeled an appraisal and explicitly states that the evaluation was performed by an individual that is not licensed as an appraiser in accordance with §30-38-1, et seq. Individuals performing these evaluations may be compensated for their services.
§30-38-3. Definitions.
As used in this article, the following terms have the following meanings:
(a) "Appraisal" means an analysis, opinion, or conclusion prepared by a real estate appraiser relating to the nature, quality, value, or utility of specified interests in, or aspects of, identified real estate or identified real property. An appraisal may be classified by the nature of the assignment as a valuation appraisal, an analysis assignment, or a review assignment.
(b) "Analysis assignment" means an analysis, opinion, or conclusion prepared by a real estate appraiser that relates to the nature, quality, or utility of identified real estate or identified real property.
(c) "Appraisal foundation" means the appraisal foundation established on November 30, 1987, as a not-for-profit corporation under the laws of Illinois.
(d) "Appraisal report" means any communication, written or oral, of an appraisal. An appraisal report may be classified by the nature of the assignment as a "valuation report", "analysis report", or "review report". For purposes of this article, the testimony of an appraiser dealing with the appraiser’s analyses, conclusions, or opinions concerning identified real estate or identified real property is considered an oral appraisal report.
(e) "Board" means the real estate appraiser licensing and certification board established by the provisions of this article.
(f) "Certified appraisal report" means a written appraisal report that is certified by a state licensed or certified real estate appraiser. When a real estate appraiser identifies an appraisal report as "certified", the real estate appraiser must indicate the type of licensure or certification he or she holds. By certifying an appraisal report, a state licensed residential real estate appraiser, a state certified general real estate appraiser, or a state certified residential real estate appraiser represents to the public that the report meets the appraisal standards established by this article.
(g) "Certified real estate appraiser" means a person who holds a current, valid certification as a state certified residential real estate appraiser or a state certified general real estate appraiser issued to him or her under the provisions of this article.
(h) "Complex appraisal" means an appraisal that: (1) For nonresidential property, relies on all three approaches to value, being the cost approach, the income approach, and the sales comparison approach, or does not have the characteristics of a noncomplex appraisal; and (2) for residential property, relies to any significant degree on at least two of the three approaches to value, with one approach being the sales comparison approach, or one in which the property to be appraised, the form of ownership, or the market conditions are atypical.
(i) "Cost approach" means an approach to valuing real estate that requires an appraiser to: (1) Develop an opinion of site value by an appropriate appraisal method or technique; (2) analyze comparable cost data as are available to estimate the cost new of the improvements if any; and (3) analyze comparable data as are available to estimate the difference between the cost new and the present worth of the improvements, also called accrued depreciation.
(j) "Evaluation" means an opinion about the market value of real estate that is:
(1) Made in accordance with the 2010 "Interagency Appraisal and Evaluation Guidelines" developed by the following federal agencies that regulate financial institutions: The Federal Reserve Board; The Office of the Comptroller of the Currency; The Federal Deposit Insurance Corporation; The Office of Thrift Supervision; and the National Credit Union Administration,
(2) Provided to a financial institution for use in a real estate related transaction for which an appraisal is not required by the federal agencies listed in subsection (j)(1) of this section.
(k) "Income approach" means an approach to valuing real estate that requires an appraiser to: (1) Analyze comparable rental data as are available to estimate the market rental of the property; (2) analyze comparable operating expense data as are available to estimate the operating expenses of the property; (3) analyze comparable data as are available to estimate rates of capitalization or rates of discount; and (4) base projections of future rent and expenses on reasonably clear and appropriate evidence.
(l) "Licensed real estate appraiser" means a person who holds a current, valid license as a state licensed residential real estate appraiser issued to him or her under the provisions of this article.
(m) "Noncomplex appraisal" means an appraisal for which: (1) There is an active market of essentially identical properties; (2) adequate data is available to the appraiser; (3) adjustments to comparable sales are not large in the aggregate, specifically not exceeding the trading range found in the market of essentially identical properties; and (4) for residential properties, the contract sales price falls within the market norm or median sales price for homes or lots within the same area.
(n) "Real estate" means an identified parcel or tract of land, including improvements, if any.
(o) "Real estate appraisal activity" means the act or process of making an appraisal of real estate or real property and preparing an appraisal report.
(p) "Real estate appraiser" means a person who engages in real estate appraisal activity for a fee or other valuable consideration.
(q) "Real property interests" means one or more defined interests, benefits, or rights inherent in the ownership of real estate.
(r) "Review assignment" means an analysis, opinion, or conclusion prepared by a real estate appraiser that forms an opinion as to the adequacy and appropriateness of a valuation appraisal or an analysis assignment.
(s) "Sales comparison approach" means an approach to valuing real estate that requires an appraiser to analyze such comparable sales data as are available to indicate a value conclusion.
(t) "Valuation appraisal" means an analysis, opinion, or conclusion prepared by a real estate appraiser that estimates the value of an identified parcel of real estate or identified real property at a particular point in time.
§30-38-6. Board created; appointments, qualifications, terms, oath, removal of members; quorum; meetings; disqualification from participation; compensation; records; employing staff.
(a) The West Virginia Real Estate Appraiser Licensing and Certification Board, which consists of nine members appointed by the Governor with the advice and consent of the Senate, is continued.
(1) Each member shall be a resident of the State of West Virginia, except the appraisal management company representative is not required to be a resident of West Virginia.
(2) Four members shall be certified real estate appraisers having at least five years' experience in appraisal as a principal line of work immediately preceding their appointment, and shall remain certified real estate appraisers throughout their terms.
(3) Two members shall have at least five years' experience in real estate lending as employees of financial institutions.
(4) Two members may not be engaged in the practice of real estate appraisal, real estate brokerage or sales, or have any financial interest in these practices.
(5) One member shall be a representative from an appraisal management company registered under the provisions of §30-38A-1, et seq. of this code.
(6) No member of the board may concurrently be a member of the West Virginia Real Estate Commission.
(7) Not more than three appraiser members may be appointed from a congressional district.
(b) Members will be appointed for three-year terms, which are staggered in accordance with the initial appointments under prior enactment of this act.
(1) No member may serve for more than three consecutive terms.
(2) Before entering upon the performance of his or her duties, each member shall subscribe to the oath required by section five, article IV of the constitution of this state.
(3) The Governor shall, within 60 days following the occurrence of a vacancy on the board, fill the vacancy by appointing a person who meets the requirements of this section for the unexpired term.
(4) Any member may be removed by the Governor in case of incompetency, neglect of duty, gross immorality, or malfeasance in office.
(c) The board shall elect a chairman.
(d) A majority of the members of the board constitutes a quorum.
(e) The board shall meet at least once in each calendar quarter on a date fixed by the board.
(1) The board may, upon its own motion, or shall upon the written request of three members of the board, call additional meetings of the board upon at least 24 hours' notice.
(2) No member may participate in a proceeding before the board to which a corporation, partnership, or unincorporated association is a party, and of which he or she is or was at any time in the preceding 12 months a director, officer, owner, partner, employee, member, or stockholder.
(3) A member may disqualify himself or herself from participation in a proceeding for any other cause the member considers sufficient.
(f) The appointed members will receive compensation and expense reimbursement in accordance with the provisions of §30-1-11 of this code.
(g) The board may employ and authorize staff as necessary to perform the functions of the board, to be paid out of the board fund created by the provisions of this article. Persons employed by any real estate agent, broker, appraiser, or lender, or by any partnership, corporation, association, or group engaged in any real estate business, may not be employed by the board. The board may hire a licensed or certified appraiser whose license status is inactive or who is not employed by any of the prohibited employers listed.
§30-38-7. General powers and duties.
The board shall:
(a) Define by rule the type of educational experience, appraisal experience and equivalent experience that will meet the statutory requirements of this article;
(b) Establish examination specifications as prescribed herein and provide for appropriate examinations;
(c) Establish registration requirements and procedures for appraisal management companies under the provisions of §30-38a-1, et seq.;
(d) Approve or disapprove applications for certification and licensure;
(e) Approve or disapprove applications for registration under the provisions of §30-38a-1, et seq.;
(f) Define by rule continuing education requirements for the renewal of certifications and licenses;
(g) Censure, suspend or revoke licenses and certification as provided in this article;
(h) Suspend or revoke registrations under the provisions of §30-38a-1, et seq.;
(i) Hold meetings, hearings and examinations;
(j) Establish procedures for submitting, approving and disapproving applications;
(k) Maintain an accurate registry of the names, addresses and contact information of all persons certified or issued a license to practice under this article;
(l) Maintain an accurate registry of the names, addresses and contact information of all persons and firms registered under the provisions of article thirty-eight-a of this chapter;
(m) Maintain accurate records on applicants and licensed or certified real estate appraisers;
(n) Maintain accurate records on applicants under the provisions of article thirty-eight-a of this chapter;
(o) Issue to each licensed or certified real estate appraiser a copy of their current active license credential via an electronic format of the board’s choosing;
(p) Issue registration numbers to registrants under the provisions of article thirty-eight-a of this chapter;
(q) Deposit all fees collected by the board to the credit of the West Virginia appraiser licensing and certification board fund established in the office of the State Treasurer. The board shall disburse moneys from the account to pay the cost of board operation. Disbursements from the account may not exceed the moneys credited to it;
(r) Keep records and make reports as required by article one of this chapter; and
(s) Perform any other functions and duties necessary to carry out the provisions of this article and article thirty-eight-a of this chapter.
§30-38-11. Applications for license or certification; renewals.
(a) An individual who desires to engage in real estate appraisal activity in this state shall make application for a license, in writing, on a form as the board may prescribe.
(b) To assist the board in determining whether grounds exist to deny the issuance of a license to an applicant, the board may require the fingerprinting of every applicant for an original license.
(c) The payment of the appropriate fee must accompany all applications for original certification and renewal of certification and all applications to take an examination.
(d) At the time of filing an application for original certification or for renewal of certification, each applicant shall sign a pledge to comply with the standards of professional appraisal practice and the ethical rules to be observed by an appraiser. Each applicant shall also certify that he or she understands the types of misconduct, as set forth in this article, for which disciplinary proceedings may be initiated.
(e) To obtain a renewal of license or certification under this article, the holder of a current license or certification shall make application and pay the prescribed fee to the board no earlier than 120 days nor later than 30 days prior to the expiration date of the current license or certification. Each application for renewal must be accompanied by evidence in the form prescribed by the board that the applicant has completed the continuing education requirements for renewal specified in this article and the board’s rules.
(f) If the board determines that an applicant for renewal has failed to meet the requirements for renewal of license or certification through mistake, misunderstanding, or circumstances beyond the control of the applicant, the board may extend the term of the applicant’s license or certification for a period not to exceed six months upon payment by the applicant of a prescribed fee for the extension. If the applicant for renewal of license or certification satisfies the requirements for renewal during the extension period, the beginning date of his or her renewal license or certificate shall be the day following the expiration of the certificate previously held by the applicant.
(g) If a state-licensed or certified real estate appraiser under this article fails to renew his or her license or certification prior to its expiration or within any period of extension granted by the board pursuant to this article, the applicant may obtain a renewal of his or her license or certification by satisfying all of the requirements for renewal and filing an application for renewal, accompanied by a late renewal fee: Provided, That the applicant can demonstrate they could resume practicing with reasonable skill and safety in accordance with §30-1-8a of this code.
(h) The board may deny the issuance or renewal of a license or certification for any reason enumerated in this article or in the rules of the board, or for any reason for which it may refuse an initial license or certification.
(i)(1) If the board denies issuance of a renewal of a license or certification, or denies an initial license or certification application, the board shall provide a written statement to the applicant for an initial license or certification, or applicant for a renewal of a license or certification, clearly describing the deficiencies of the application for his or her license or certificate.
(2) The board shall provide this statement to an initial applicant or a renewal applicant within 15 calendar days of its decision to deny licensure or certification. The board may send its statement through the United States mail, electronic mail service, or both, to ensure it reaches the applicant or renewal applicant.
(3) If the basis for the denial is due to submitted appraisals failing to conform to the Uniform Standards of Professional Appraisal Practice (USPAP), the board shall provide written guidance to the applicant describing, in detail, each aspect of each submitted appraisal that does not conform to USPAP and the corrective action necessary to remedy nonconformity. The board shall provide 60 days to the applicant to remedy any nonconformity. The applicant shall resubmit any corrected appraisals on or before the 60th day and the board shall reevaluate the appraisals only pertaining to any nonconformity. If the nonconformity or nonconformities are remedied and resubmitted on or before the 60th day, the board shall accept the appraisal for purposes of issuing a license.
The Clerk of the House of Delegates and the Clerk of the Senate hereby certify that the foregoing bill is correctly enrolled.
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Clerk of the House of Delegates
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Clerk of the Senate
Originated in the House of Delegates.
In effect ninety days from passage.
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Speaker of the House of Delegates
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President of the Senate
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The within is ................................................ this the...........................................
Day of ..........................................................................................................., 2024.
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Governor
